For Written Answer on : 20/09/2022
Question Number(s): 459 Question Reference(s): 45798/22
Asked by: David Stanton T.D.
To ask the Minister for Justice if she is considering changes to champerty and maintenance; and if she will make a statement on the matter.
As the Deputy may be aware, third-party funding of litigation is currently illegal in this jurisdiction. The concept of “Maintenance” is where a party without an interest in an action funds the litigation of another. The concept of “Champerty” is where a party without an interest in an action funds the litigation of another but also with a view to sharing the profits of the action.
Aspects of litigation funding are also considered to be contrary to public policy. In particular, litigation funding may drive a market in legal claims and promote litigation for the benefit of the promoter rather than the litigant. This, in turn, may create a substantial injustice to a defendant in an action. The cost of litigation and its impact on access to justice has, however, been a matter of concern for some time.
Chapter 9 of the Review of the Administration of Civil Justice (Kelly) Report recommends a policy review of third-party funding of litigation costs. Implementation of the review’s recommendations will take place on a phased basis over a number of years. I am advised that the Law Reform Commission, arising from its June 2016 Issues Paper on “Contempt of Court and Other Offences and Torts Involving the Administration of Justice”, is working on a discussion paper on the matter, which will be available in the coming months. The outcome of that consultation process will be considered as part of a policy review and proposals developed if required.
As an interim step however, I am considering recommending to Government that third party funding be permitted in a limited way, specifically in relation to commercial arbitration. This should assist the broader Government policy of promoting Ireland as a destination of choice for international commercial legal business under the Ireland for Law initiative.
Separately, the Department of Enterprise, Trade and Employment is working on a draft Bill to transpose EU Directive 2020/1828 into Irish Law. The General Scheme of the Representative Actions for the Protection of the Collective Interests of Consumers Bill 2022 was published earlier this year. Part 2 of the Bill will prescribe the manner in which representative actions are brought before the High Court and will transpose Article 10 of the Directive, which relates to the matter of third-party funding of litigation. The Directive does not impose any requirements on Member States to make changes to domestic law regarding third-party funding for litigation. The Bill will require the High Court judge hearing the case to undertake a mandatory assessment of compliance of the qualified entity with the law in Ireland regarding third-party funding “in so far as allowed” when the representative action is brought. Subject to Government approval, it is expected that the Bill will be published later this year.